Mandela Proposes Policy

Of Domestic Moderation

May 25, 1994|The Washington Post

CAPE TOWN, South Africa — President Nelson Mandela set forth a moderate domestic policy agenda on Tuesday in his first major speech to parliament, pledging to address the material wants left by apartheid without resorting to deficit spending or permanent tax increases.

The address, which amounted to a state-of-the-nation speech, seemed tailored more for corporate boardrooms than the townships where many of South Africa's poor blacks live. In many ways, it represented the culmination of a shift in Mandela's African National Congress away from socialism and to a version of market economics more in tune with South Africa's present system.

Mandela thus struck a theme of fiscal discipline even as he outlined his vision of a "people-centered society" where all South Africans would be free from hunger, deprivation, ignorance, suppression and fear.

He proposed reallocating about $700 million - or 3 percent - of the 1994-95 national budget to programs for upgrading housing, electricity, water and sewage systems, education and health services for the nation's mostly black poor. That figure is to rise steadily until it reaches more than $2.8 billion in the fifth year of the new government's Reconstruction and Development Program.

Mandela said the money would come from across-the-board cuts in other government departments. Even with the increased social spending, he said he expected to reduce the government's annual deficit spending, now running at 6.8 percent, and to avoid permanent tax hikes.

Finance Minister Derek Keys, a holdover from the old National Party government, acknowledged that some temporary tax increases might be needed. But he said it should be possible to finance the domestic agenda through civil service attrition, streamlining of redundant apartheid bureaucracies and spending cuts in certain areas, such as defense.

When the white minority government lifted the ban on liberation organizations in 1990, most of the black leaders who came out of jail or returned from exile were still wedded to a socialist vision of wide-scale wealth redistribution.

Over the ensuing years, ANC officials won most of the constitutional debates.